Start-ups face significant challenges due to Covid crisis

Aurangabad, Sept 29:
Start-ups have emerged as key drivers of economic growth and job creation in Marathwada, but the Covid-19 crisis has become a challenge for their survival. Business registrations have been dropping significantly and start-ups are finding it difficult to find funding, investors and opportunities for their projects.
Aurangabad is a emerging Startup hub in Maharashtra. The city is home to startups operating in emerging sectors such as agritech, automotive technology, deep tech, software, fintech startups and analytics. The city is a base for over 50 startups. Both the centre and the state government and various industrial organisations are pushing for city to become the next startup hub. Marathwada Accelerator for Growth and Incubation Council (MAGIC), set up by CMIA, caters to the startups needs, brings together incubators, investors, and mentors who can help and provide guidance. However, the lockdown have had a negative impact on the startups. At least 50 per cent of startups are facing significant negative impact on funding due to the Covid-19 crisis, with most early-stage startups facing a major funding crunch. Rajesh Jahgirdar of MyBuzztech startup said, "As demand came to a standstill, startup revenues have been hit hard, forcing start-ups to either shut down or transform their business models altogether to withstand the crisis. Many startups have minimized their expenses to survive. Funding has reduced drastically. Many startups are in their second or the third phase of innovation. But it has now become a challenge to get funds. The scope for innovation has also reduced," Jahgirdar said. To combat the funding crunch, startups are resorting to several measures such as seeking government support, loans from banks and non-banking financial institutions, and capital infusions from existing and new investors. Sumit Pande of I-Tech startup believes that the Covid-19 impact will last up to a year, with a majority seeking immediate government support in the form of favourable policies, easing regulations, partnership opportunities, and reimbursements on immediate fixed costs, among others. To ensure that the startup movement and its growth trajectory in Marathwada is not derailed, Coordinated support from key stakeholders is the need of the hour. Some of our key recommendations to the government include access to working capital, easing compliances and fiscal policy, and funding support,” said CMIA president Kamleish Dhoot. More funding support should be provided to early-stage startups.